• by Tyler Loechner , Staff Writer @mp_tyler, June 9, 2015

AppNexus has added a layer to its platform that allows advertisers and agencies -- as well as trading desks, networks and other ad tech companies -- to bring their own algorithms into the fold.

AppNexus is calling it the “AppNexus Programmable Bidder,” and the main draw of this new service layer is that it allows the buy-side to maintain control of its data. 

"Until now, advertisers who wanted to leverage their data assets had to make an unhappy choice: incur enormous cost and complication to build their own bidders, with all their attendant latency and scale challenges, to be able to apply their own models and algorithms; or turn their data over to a third-party black box,” stated Catherine Williams, chief data scientist at AppNexus.

AppNexus says its new tech creates a third option: “Now they can devote resources and time to strategy and tell AppNexus’ scaled platform what to do,” an AppNexus representative explained to Real-Time Daily.

There’s an important distinction to note here between a “bidder” -- which AppNexus asserts costs a fortune and is complicated to master -- and an “algorithm,” which is where automated decisions are made before being sent to the bidder.

In short, AppNexus is telling advertisers they can bring their own algorithms and use AppNexus’ existing bidder.

Bringing your own algorithm is not a requirement to use AppNexus, but the hope is that the new service will attract more advertisers and agencies into the world of algorithmic media-buying; namely, those that didn’t do it before because they couldn’t create an effective bidder or were skeptical of putting their data into “black boxes.”

“We’ll continue to build and perfect our optimization algorithms, and customers can test theirs against ours to see which provide the desired outcomes,” a rep told Real-Time Daily. “It gives them a choice. Not all customers even want to invest in their own algorithms. Some will use both, some will use one or the other.”

"We'd ultimately like to see a world in which advertisers and agencies evaluate their proprietary optimization formulas against AppNexus' algorithms and refine and adapt their campaigns accordingly," Brian O’Kelley, AppNexus CEO, said in a statement. Boiling down the marketspeak, O'Kelley wants marketers to optimize their media buys by using more than one algorithm to inform decisions. 

Of course, building your own algorithm is still a complicated task even if you don’t create a bidder to cap it off, but AppNexus has built its business on strong technology and appeals to the tech-savvy crowds. They might even do it too much -- one of the knocks against AppNexus in the recent Forrester DSP Wave report was that barriers exist between AppNexus and the less tech-savvy marketers out there.

The launch of the AppNexus Programmable Bidder shows that the company is staying true to its roots (“Hey geeks, come upload your custom algorithms with us!”), but in an ironic way it's loosening up a bit by giving marketers more flexibility.

Another vision of O’Kelley’s: Creating a marketplace of algorithms. The company asserts the launch of the programmable bidder “opens the door” for programmatic media companies to sell optimization services via AppNexus.

“In such a future market, buyers would be able to access, assess and rent algorithms,” the company writes in a release.